Millrock Resources Inc.
Code of Business Conduct and Ethics
We require high standards of professional and ethical conduct from our employees. Our reputation with our shareholders and prospective investors for honesty and integrity is key to the success of our business. No employee, contractor, or consultant will be permitted to achieve results through violations of laws or regulations or through unscrupulous dealings.
We intend that the Company’s business practices will be compatible with the economic and social priorities of each location in which we operate. Although customs vary by country and standards of ethics may vary in different business environments, honesty and integrity must always characterize our business activity. If a law conflicts with a policy in this Code, you must comply with the law; however, if a local custom or policy conflicts with this Code, you must comply with the Code. If you have any questions about these conflicts, you should ask your supervisor how to handle the situation.
This Code reflects our commitment to a culture of honesty, integrity and accountability and outlines the basic principles and policies with which all employees, contractors, and consultants are expected to comply. Please read this Code carefully.
In addition to following this Code in all aspects of your business activities, you are expected to seek guidance in any case where there is a question about compliance with both the letter and the spirit of our policies and applicable laws. This Code covers a wide range of business practices and procedures. It does not cover every issue that may arise, but it sets out basic principles to guide all employees, contractors, and consultants of the Company. This Code does not supersede the specific policies and procedures that are covered in the Company’s operating manuals or in separate specific policy statements. References in this Code to the “Company” means the Company or any of its subsidiaries. Reference to “employees” includes officers, contractors, and consultants.
Those who violate the standards set forth in this Code will be subject to disciplinary action up to and including dismissal.
Your cooperation is necessary to the continued success of our business and the cultivation and maintenance of our reputation as a good corporate citizen.
2. Compliance with Laws, Rules and Regulations
Compliance with the letter and spirit of all laws, rules and regulations applicable to our business is critical to our reputation and continued success. All employees must respect and obey the laws of the cities, provinces, states and countries in which we operate and avoid even the appearance of impropriety. Not all employees are expected to know the details of these laws, but it is important to know enough to determine when to seek advice from supervisors, managers or other appropriate personnel.
3. Conflicts of Interest
A conflict of interest occurs when an individual’s private interest interferes, or appears to interfere, in any way with the interests of the Company. A conflict situation can arise when an employee or director takes actions or has interests that may make it difficult to perform his or her work for the Company objectively and effectively. Conflicts of interest also arise when an employee or director, or a member of his or her family, receives improper personal benefits as a result of his or her position in the Company.
It may be perceived as a conflict of interest for an employee to work simultaneously for a competitor, customer or supplier. Therefore, working for a competitor, as a consultant or director, is discouraged by the Company. The best policy is to avoid any direct or indirect business connection with our customers, suppliers or competitors, except on behalf of the Company. However, should you find yourself in a situation as such, you are expected to disclose the potential conflict of interest to both the Company, and the other party.
Activities that could give rise to conflicts of interest are prohibited unless specifically approved by the Board of Directors or the Audit Committee. It is not always easy to determine whether a conflict of interest exists, so any potential conflicts of interests should be reported immediately to senior management or the Company’s general legal counsel.
Given that the Directors are engaged in a wide range of activities, each Director or officer is required to disclose to the Company’s Board of Directors any interest in a material contract or transaction or proposed material contract or transaction with the Company or the fact that such person is a director or officer of, or otherwise has a material interest in, any person who is a party to a material contract or transaction or proposed material contract or transaction with the Company. Such disclosure is required to be made at the first meeting at which a proposed contract or transaction is considered. In any case, a Director who has made disclosure to the foregoing effect is not entitled to vote on any resolution to approve the contract or transaction unless the Company’s general legal counsel advises that voting on such resolution is permissible.
4. Corporate Opportunities
Employees and directors are prohibited from taking for themselves personally opportunities that arise through the use of corporate property, information or position and from using corporate property, information or position for personal gain. Employees and directors are also prohibited from competing with the Company directly or indirectly. Employees and directors owe a duty to the Company to advance the legitimate interests of the Company when the opportunity to do so arises.
Employees must maintain the confidentiality of information entrusted to them by the Company or that otherwise comes into their possession in the course of their employment, except when disclosure is authorized or legally mandated. Employees may be required to execute a confidentiality agreement upon employment and from time to time during the course of employment. The obligation to preserve confidential information continues even after you leave the Company.
Confidential information includes all non‑public information that may be of use to competitors, or harmful to the Company or its customers, if disclosed. It also includes information that suppliers, customers and other parties have entrusted to us.
6. Protection and Proper Use of Company Assets
All employees should endeavour to protect the Company’s assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the Company’s financial health. Any suspected incidents of fraud or theft should be immediately reported for investigation.
Company assets, such as equipment, funds or computers, may only be used for legitimate business purposes or other purposes approved by management. Company assets may never be used for illegal purposes.
The obligation to protect Company assets includes proprietary information. Proprietary information includes any information that is not generally known to the public or would be helpful to our competitors. Examples of proprietary information include intellectual property, such as trade secrets, patents, trademarks and copyrights, as well as business, marketing and service plans, proprietary geological concepts, engineering and manufacturing ideas, designs, contact lists, databases, records, salary information and any unpublished geological, geophysical, geochemical, financial data or reports. Unauthorized use or distribution of this information is a violation of Company policy. It may also be illegal and may result in civil and criminal penalties. The obligation to preserve proprietary information continues even after you leave the Company.
7. Insider Trading
Employees who have access to confidential information are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of the business of the Company. All material undisclosed information about the Company should be considered confidential. To use material undisclosed information for personal financial benefit or to “tip” others who might make an investment decision on the basis of this information, is not only unethical, but also illegal. Further reference can be made to the TSX Venture Exchange Policy 3.1, Section 9.
8. Fair Dealing
We seek to outperform our competition fairly and honestly and to acquire, explore and develop mineral projects in a fair and honest manner. We seek competitive advantages through superior performance and never through unethical or illegal business practices. Stealing proprietary information, possessing trade secret information obtained without the owner’s consent or inducing the disclosures of proprietary information or trade secrets by past or present employees of other companies is prohibited. Each employee should endeavor to deal fairly with the Company’s business associates, option partners, joint venture partners, suppliers, competitors and employees. No employee should take unfair advantage of anyone through illegal conduct, manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair‑dealing practice.
9. Discrimination and Harassment
We value the diversity of our employees and are committed to providing equal opportunity in all aspects of employment. Abusive, harassing or offensive conduct is unacceptable, whether verbal, physical or visual. Examples include derogatory comments based on racial or ethnic characteristics and unwelcome sexual advances. Employees are encouraged to speak out when a co‑worker’s conduct makes them uncomfortable and to report harassment when it occurs.
10. Safety and Health
We are all responsible for maintaining a safe and healthy workplace by following safety and health rules and practices, and more specifically detailed in the Company’s Health and Safety Manual (“HSM”). For field projects, the HSM shall include program-specific Environmental, Health and Safety (“EHS”) Plans that Project Geologists are responsible for submitting to the the responsible country manager, or executive responsible for a particular jurisdiction President & CEO prior to program commencement. Programs may not commence without an EHS Plan approved by the responsible manager or executivePresident & CEO. The Company is committed to keeping its workplaces and project areas free from hazards. Please report any accidents, injuries, unsafe equipment, practices or conditions immediately to a supervisor or other designated person. Threats or acts of violence or physical intimidation are prohibited.
In order to protect the safety of all employees, employees must report to work in condition to perform their duties and free from the influence of any substance that could prevent them from conducting work activities safely and effectively. The use of alcohol or illegal drugs in the workplace is prohibited. Likewise, employees are prohibited from being under the influence of alcohol or illegal drugs during the course of their duties.
11. Recordkeeping and Financial Statements
Honest and accurate recording and reporting of information is critical to our financial reporting and our ability to make responsible business decisions. The Company’s accounting records are relied upon to produce reports for the Company’s management, shareholders, creditors, governmental agencies and others. Our financial statements and the books and records on which they are based must truthfully and accurately reflect all corporate transactions and conform to all legal and accounting requirements and our system of internal controls.
All employees have a responsibility to ensure that the Company’s records, including accounting records, do not contain any false or intentionally misleading entries. We do not permit intentional misclassification of transactions as to accounts, departments or accounting periods. All transactions must be supported by accurate documentation in reasonable detail and recorded in the proper account and in the proper accounting period.
All Company books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect Company transactions and must conform to both applicable legal requirements and the system of internal controls of the Company. Unrecorded or “off the books” funds or assets should not be maintained unless permitted by applicable law or regulation.
Business records and communications may become public through legal or regulatory investigations or the media. Exaggeration, derogatory remarks, legal conclusions or inappropriate characterizations of people and companies must be avoided. This applies to communications of all kinds, including email and informal notes or interoffice memos.
12. Invest Relations and Public Affairs
It is very important that the information disseminated about the Company be both
accurate and consistent. For this reason, the CEO is responsible for: (i) the Company’s internal and external communications; (ii) public communications with stockholders, analysts and other interested members of the financial community; and (iii) communication with spokespersons in both routine and crisis situations. Communications with members of print, radio or television media must be approved by the CEO.
13. Use of E-Mail, Internet and Social Media Services
(a) E-MAIL AND INTERNET USAGE
Company Internet and e-mail access may not be used for transmitting, retrieving or storing of any communications of a defamatory, discriminatory, harassing or pornographic nature. No messages with derogatory or inflammatory remarks about an individual's race, age, disability, religion, national origin, physical attributes or sexual preference shall be transmitted. Harassment of any kind is prohibited.
Disparaging, abusive, profane, or offensive language; materials that might adversely or negatively reflect upon the Company or be contrary to the Company’s best interests; and any illegal activities—including piracy, cracking, extortion, blackmail, copyright infringement, and unauthorized access to any computers on the Internet or e-mail—are forbidden.
Copyrighted materials belonging to entities other than the Company may not be transmitted by employees on the Company's network. All employees obtaining access to other companies' or individual's materials must respect all copyrights and may not copy, retrieve, modify or forward copyrighted materials, except with permission or as a single copy to reference only. If you find something on the Internet that may be interesting to others, do not copy it to a network drive. Instead, give the URL (uniform resource locator or "address") to the person who may be interested in the information and have that person look at it on his/her own.
Do not use the system in a way that disrupts its use by others. This includes excessive dial-in usage, sending or receiving many large files and "spamming" (sending e-mail messages to thousands of users.)
The Internet is full of useful programs that can be downloaded, but some of them may contain computer viruses that can extensively damage our computers. Be sure to virus-check downloaded files immediately. If you need to obtain instructions on how to check for viruses please consult with your supervisor. Also, many browser add-on packages (called "plug-ins") are available to download. There is no guarantee that such will be compatible with other programs on the network and such may cause problems; therefore, please refrain from downloading such plug-ins.
Each employee is responsible for the content of all text, audio or images that he/she places on or sends over the Company's Internet and e-mail system. No e-mail or other electronic communications may be sent which hides the identity of the sender or represents the sender as someone else. Also, be aware that the Company’s name is attached to all messages so use discretion in formulating messages.
Generally, e-mail is not private or confidential. All electronic communications are Company property. Therefore, the Company reserves the right to examine, monitor and regulate e-mail messages, directories and files, as well as Internet usage. In addition, the Internet is not secure so do not assume that others cannot read -- or possibly alter -- your messages. Each employee has signed a separate confidentiality agreement that explains this in further detail.
Some employees are entitled to use Company-owned portable computers and telephones at places other than Millrock’s premises. These employees are welcome to use these electronic devices for personal use. However, these employees should be aware that all data stored on the device is not private or confidential and is subject to examination by Millrock management at any time.
Internal and external e-mail messages are considered business records and may be subject to discovery in the event of litigation. Be aware of this possibility when sending e-mail within and outside the Company.
All Company-supplied technology, including computer systems and Company-related work records, belong to the Company and not the employee. The Company routinely monitors usage patterns for its e-mail and Internet communications. Although encouraged to explore the vast resources available on the Internet, employees should use discretion in the sites that are accessed.
Since all the computer systems and software, as well as the e-mail and Internet connection, are Company-owned, all Company policies are in effect at all times. Any employee who abuses the privilege of Company facilitated access to e-mail or the Internet, may be denied access to the Internet and, if appropriate, be subject to disciplinary action up to and including termination.
(b) SOCIAL MEDIA USAGE
This section of the Code is intended for use as a guide when you contribute to or participate in any social media. Not only does it protect both you and the Company, but also you can have confidence knowing you are representing the Company in a responsible way and in an appropriate manner. While the Company respects your privacy, conduct that has or has the potential to have a negative effect on the Company may be subject to disciplinary action up to an including termination, regardless of the time and location of the conduct and regardless if your conduct is communicated in person or by phone, computer or other electronic device. Please refer to the other provisions of this Code for further guidance.
As employees, we are accountable for how we represent and communicate about the Company, whether it’s in person, on the phone, in print or online. Before you post information online that may relate in any way to the Company, you have a duty of care to thoughtfully consider what you communicate and how you communicate it.
Social media are Internet based tools for sharing and discussing information
The term “social media” most often refers to activities that integrate technology, social interaction and the sharing of words, pictures, videos and audio, such as:
- Multimedia and social networking sites, like Twitter, Facebook, YouTube, LinkedIn, Instagram, or MySpace
- Blogs, wikis, message boards, forums, bullboards, microblogs and other community‐based sites or collaboration tools
- Social commerce postings, like product or experience reviews
- Any other site where information – like text, images, video, sound or other files – can be uploaded or posted
The ten guidelines below explain our policies as they apply to social media:
- Keep confidential information confidential. Any statement, whether made online or offline or through images, videos or sound files, related to or referencing the organization’s business, customers, products or other employees, regardless of the media or forum used, must strictly comply with business policies and procedures as outlined in this Code. Keep any Internet‐based conversation about the Company focused on publicly‐known information. Posting insider information or false statements is strictly prohibited. If you are not sure whether something is appropriate to post, refrain from posting.
- Initiating social media user accounts. At no time should an employee initiate any social media accounts or post content on behalf or appearing to be on behalf of the Company.
- Be accurate, truthful and considerate in your posts. Be constructive, provide appropriate context, and think about the potential impacts of your comments.
- Take responsibility for your words. Remember that individuals can be held personally accountable for comments deemed to be defamatory, obscene, proprietary or libelous, whether they pertain to the Company, another business or another person.
- Assume that anyone can see what you post. The internet is a fully searchable, which means that anyone with an Internet connection – anyone, including regulatory agencies, shareholders, competitors, your employer and other employees can find and see postings.
- Identify yourself. Use a personal email address as your primary means of identification for any social media accounts. Company email addresses are intended for corporate use.
- Your work commitments. Ensure that your social media activity does not interfere or conflict with your work commitments. It is expected that while at work you are not abusing your computer privileges and accessing social media sites during work hours.
- Intellectual property. The Company’s intellectual property, logos, trademarks, and copyrights may not be used in any manner.
- Pass on any press inquiries. Social media postings occasionally generate media coverage. If you are ever asked to make a comment outside of the business, refer the inquiry to the CEO.
- Be safe. Be careful about posting personal information online, whether it is information about you, other employees or stakeholders. Personal information can include photos, addresses and phone numbers, information about where and when you work, routines, or anything else that could compromise your safety or that of other employees.
If you have seen something that you think violates these guidelines, or questions regarding them, start by reviewing this Code, and speaking with your Manager.
14. Political Contributions
You must refrain from making any use of Company, personal or other funds or resources on behalf of the Company for political or other purposes which are improper or prohibited by the applicable federal, provincial, territorial, state, local or foreign laws, rules or regulations. Company contributions or expenditures in connection with election campaigns may be permitted only to the extent allowed by federal, provincial, territorial, state, local or foreign election laws, rules and regulations.
You are encouraged to participate actively in the political process. We believe that individual participation is a continuing responsibility of those who live in a free country.
15. Gifts and Entertainment
Business gifts and entertainment are customary courtesies designed to build goodwill among business partners. These courtesies include such things as meals and beverages, tickets to sporting or cultural events, discounts not available to the general public, travel, accommodation and other merchandise or services. In some cultures they play an important role in business relationships. However, a problem may arise when such courtesies compromise ¾ or appear to compromise ¾ our ability to make objective and fair business decisions.
Offering or receiving any gift, gratuity or entertainment that might be perceived to unfairly influence a business relationship should be avoided. These guidelines apply at all times, and do not change during traditional gift‑giving seasons. No gift or entertainment should ever be offered, given, provided or accepted by any director or employee of the Company, or by any family member of a director or employee, unless it:
- is not a cash gift;
- is consistent with customary business practices;
- is not excessive in value;
- cannot be construed as a bribe or payoff; and
- does not violate any applicable laws or regulations.
Please discuss with your supervisor any gifts or proposed gifts if you are uncertain whether they are appropriate.
You are strictly forbidden from offering, promising or giving money, gifts, loans, rewards, favors or anything of value to any governmental official, employee, agent or other intermediary, which is prohibited by law. Those paying a bribe may subject the Company and themselves to civil and criminal penalties. When dealing with government customers or officials, no improper payments will be tolerated. If you receive any offer of money or gifts that is intended to influence a business decision, it should be reported to your supervisor or the CEO immediately. The Company prohibits improper payments in all of its activities, whether these activities are with governments or in the private sector.
17. Waivers of this Code of Business Conduct and Ethics
Any waiver of this Code with respect to a director or officer of the Company may be made only by the Board of Directors or the Audit Committee. Any such waiver will be promptly disclosed to the extent required by applicable law or stock exchange regulation.
18. Reporting of any Illegal or Unethical Behavior
We have a strong commitment to conduct our business in a lawful and ethical manner. Employees are encouraged to talk to supervisors, managers or other appropriate personnel when in doubt about the best course of action in a particular situation and to report violations of laws, rules, regulations or this Code. We prohibit retaliatory action against any employee who, in good faith, reports a possible violation. It is unacceptable to file a report knowing it to be false.
19. Compliance Procedures
This Code cannot, and is not intended to, address all of the situations you may encounter. There will be occasions where you are confronted by circumstances not covered by policy or procedure and where you must make a judgment as to the appropriate course of action.
Since we cannot anticipate every situation that may arise, it is important for the Company to set forth a general way to approach a new question or problem. These are the steps to keep in mind:
- Make sure you have all of the facts. In order to reach the right solutions, you must be as fully informed as possible.
- Ask yourself what you are specifically being asked to do. This analysis will enable you to focus on the specific issues that are raised and the available alternatives. Use your judgment and common sense. If something seems unethical or improper, it probably is.
- Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others involved and to discuss the problem.
- Discuss the problem with your supervisor. This approach is best in most if not all situations. Your supervisor may be more knowledgeable about the issue and will appreciate being brought into the process. It is a supervisor’s responsibility to help you to solve problems.
- Seek help from Company resources. In the rare instance in which it may not be appropriate to discuss an issue with your supervisor, or in which you feel uncomfortable approaching your supervisor, discuss the problem with the Company’s general legal counsel. If you prefer to write, address your concerns to the Company’s general legal counsel or the President.
- You may report ethical violations in confidence and without fear of retaliation. If your situation requires that your identity be kept secret, the Company will protect your anonymity. The Company does not permit retaliation of any kind against employees for good faith reports of ethical violations.
- Ask first. If you are unsure of the proper course of action, seek guidance before you act.
Any violation of this Code, or other Company policies or applicable rules or regulations, may result in the board of directors requesting the resignation of the board member, or the termination of the officer, employee or consultant. Ignorance of the provisions of this Code cannot be accepted as an excuse for their non-observance. In addition, violations of legal and regulatory requirements may carry their own civil and criminal penalties, including fines and imprisonment.
21. Obligation to Shareholders
It is the obligation of the officers, directors, employees and consultants to conduct the Company’s affairs with a view to the best interests of the Company as a whole and to enhance and protect shareholder value.
22. Compliance with the Code
It is the responsibility of all officers, directors, employees and consultants to be aware of their obligations under, and to comply with, this Code. All breaches of this Code shall immediately be reported to the President and CEO (except in regard to a breach by the President and CEO, or a member of the board of directors, in which situation the breach shall be reported to the Chair of the Corporate Governance Committee). All reports by an individual of violations will be kept confidential except if otherwise required by law. Individuals who breach the Code may be subject to disciplinary action including dismissal or termination.
Millrock Resources Inc.
Audit Committee Charter
The Audit Committee (the “Committee”) is appointed by the Board of Directors (the "Board") of Millrock Resources Inc. (the “Corporation”) to assist the Board in fulfilling its oversight responsibilities.
The Committee’s primary duties and responsibilities are to:
- Review and approve management’s identification of principal financial risks and monitor the process to manage such risks.
- Review and assess management’s overall process to identify principal risks that could affect the achievement of the corporation’s business plans.
- Be directly responsible for the appointment, compensation and oversight of the external auditors.
- Oversee audits of the Corporation’s financial statements.
- Oversee and monitor the qualifications, independence and performance of the Corporation's external auditors.
- Oversee and monitor the integrity of the Corporation’s financial reporting process and system of internal controls regarding financial reporting and accounting compliance.
- Report to the Board regularly.
The Committee has the authority to conduct any review or investigation appropriate to fulfilling its responsibilities. The committee shall have unrestricted access to personnel and information, and any resources necessary to carry out its responsibility.
2.0 MAJOR RESPONSIBILITIES AND FUNCTIONS
2.1 Annual Financial Statements
Discuss and review with management and the external auditors the Corporation’s annual audited financial statements and related documents prior to their filing or distribution. Such review to include:
2.1.1 the annual financial statements and related footnotes, including significant issues regarding accounting policies and practices and significant management estimates and judgments, including any significant changes in the Corporation’s selection or application of accounting principles, any major issues as to the adequacy of the Corporation's internal controls and any specific steps adopted in light of material control deficiencies;
2.1.2 a review of the use of off-balance sheet financing, including management’s risk assessment and adequacy of disclosure;
2.1.3 a review of the external auditors’ audit examination of the financial statements and their report thereon;
2.1.4 a review of any significant changes required in the external auditors’ audit plan;
2.1.5 a review of any serious difficulties or disputes with management encountered during the course of the audit, including any restrictions on the scope of the external auditors’ work or access to required information; and
2.1.6 a review of other matters related to the conduct of the audit which are to be communicated to the Committee under generally accepted auditing standards.
2.2 Review and formally recommend approval to the Board the Corporation’s:
2.2.1 year-end audited financial statements;
2.2.2 Management’s Discussion and Analysis;
2.2.3 Annual Information Form (Form 20-F); and
2.2.4 all prospectuses and information circulars as to financial information.
The review shall include a report from the external auditors about the quality of the most critical accounting principles upon which the Corporation’s financial status depends, and which involve the most complex, subjective or significant judgmental decisions or assessments.
2.3 Quarterly Financial Statements
Review with the external auditors, if necessary, and management and either approve (such approval to include the authorization for public release) or formally recommend for approval to the Board the Corporation’s:
2.3.1 quarterly unaudited financial statements and related documents, including Management’s Discussion and Analysis; and
2.3.2 any significant changes to the Corporation’s accounting principles.
2.4 Internal Control Environment
Ensure that management provide to the Committee an annual report on the Corporation’s control environment as it pertains to the Corporation’s financial reporting process and controls.
2.4.1 Review and discuss significant financial risks or exposures and assess the steps management has taken to monitor, control, report and mitigate such risk to the Corporation.
2.4.2 Review the effectiveness of the overall process for identifying the principal risks affecting the achievement of business plans and provide the Committee’s view to the Board of Directors.
2.4.3 Review significant findings prepared by the external auditors, together with management’s responses.
2.5 Other Review Items
2.5.1 Review with the Corporation's outside legal counsel, the Corporation's Chief Financial Officer and the external auditors the result of their review of the Corporation's monitoring compliance with each of the Corporation's published codes of business conduct and applicable legal requirements.
2.5.2 Review legal and regulatory matters, including correspondence with regulators and governmental agencies that may have a material impact of the interim or annual financial statements, related corporation compliance policies, and programs and reports received from regulators or governmental agencies.
2.5.3 Review with the President & Chief Executive Officer, the Chief Financial Officer of the Corporation and the external auditors: (i) all significant deficiencies identified and material weaknesses in the design or operation of the Corporation’s internal controls and procedures for financial reporting which could adversely affect the Corporation’s ability to record, process, summarize and report financial information required to be disclosed by the Corporation in the reports that it files or submits under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”) within the required time periods and (ii) any fraud, whether or not material, that involves management of the Corporation or other employees who have a significant role in the Corporation’s internal controls and procedures for financial reporting.
2.6 External Auditors
2.6.1 Be directly responsible, in the Committee's capacity as a committee of the Board and subject to the rights of shareholders and applicable law, for the appointment, compensation and oversight of the work of the external auditors (including resolution of disagreements between management and the external auditors regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. The external auditors shall report directly to the Committee.
2.6.2 Meet on a regular basis with the external auditors (without management present) and have the external auditors be available to attend Committee meetings or portions thereof at the request of the Chairman of the Committee or by a majority of the members of the Committee.
2.6.3 Review and discuss with the external auditors all significant relationships that the external auditors and their affiliates have with the Corporation and its affiliates in order to determine the external auditors’ independence, including, without limitation, (i) receiving and reviewing, as a part of the report described in the preceding paragraph, a formal written statement from the external auditors delineating all relationships that may reasonably be thought to bear on the independence of the external auditors with respect to the Corporation and its affiliates, (ii) discussing with the external auditors any disclosed relationships or services that the external auditors believe may affect the objectivity and independence of the external auditors, and (iii) recommending that the Board take appropriate action in response to the external auditors’ report to satisfy itself of the external auditors’ independence.
2.6.4 Review and evaluate:
the external auditor’s and the lead partner of the external auditors' team's performance, and make a recommendation to the Board regarding the reappointment of the external auditors at the annual meeting of the Corporation’s shareholders or regarding the discharge of such external auditors;
the terms of engagement of the external auditors, together with their proposed fees;
external audit plans and results;
any other related audit engagement matters; and
the engagement of the external auditors to perform non-audit services, together with the fees therefore, and the impact thereof, on the independence of the external auditors.
2.7 Approval of Audit and Non-Audit Services
2.7.1 Review and, where appropriate, approve the provision of all permitted non-audit services (including the fees and terms thereof) in advance of the provision of those services by the external auditors (subject to the de minimus exception for non-audit services prescribed in applicable legislation which are approved by the Committee prior to the completion of the audit).
2.7.2 Review and, where appropriate and permitted, approve the provision of all audit services (including the fees and terms thereof) in advance of the provision of those services by the external auditors.
2.7.3 If the pre-approvals contemplated in paragraphs 2.7.1 and 2.7.2 28 and 29 are not obtained, approve, where appropriate and permitted, the provision of all audit and non-audit services promptly after the Committee or a member of the Committee to whom authority is delegated becomes aware of the provision of those services.
2.7.4 Delegate, if the Committee deems necessary or desirable, to subcommittees consisting of one or more members of the Committee, the authority to grant the pre-approvals and approvals described in paragraphs 2.7.1, 2.7.2 and 2.7.3 28 through 30. The decision of any such subcommittee to grant pre-approval shall be presented to the full Committee at the next scheduled Committee meeting.
2.8 Other Matters
2.8.1 Review and concur in the appointment, replacement, reassignment, or dismissal of the Chief Financial Officer.
2.8.2 Report Committee actions to the Board with such recommendations, as the Committee may deem appropriate.
2.8.3 Conduct or authorize investigations into any matters within the Committee’s scope of responsibilities.
2.8.4 The Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.
2.8.5 Perform such other functions as required by law, the Corporation’s charter or bylaws, or the Board.
2.8.6 Consider any other matters referred to it by the Board.
3.0 OPERATION OF COMMITTEE
The Committee shall report to the Board. The full Board shall be kept informed of the Committee's activities by circulating the minutes from the meetings to the Board, and other reports as considered necessary.
3.2 Composition of Committee
The Committee shall consist of not less than three (3) members of the Board, all of whom shall be “independent directors” as that term is defined in National Instrument 52-110. All members of the Committee shall be financially literate, as defined in National instrument 52-110. At least one member of the Committee shall have accounting or related financial management expertise including:
- education, experience and ability to analyze and interpret a full set of the Corporation’s financial statements, including the notes thereto, in accordance with generally accepted accounting principles);
- education and experience as a principal financial officer, principal accounting officer, controller, public accountant or auditor or experience in one or more positions that involve the performance of similar functions;
- an understanding of internal control over financial reporting;
- experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor or person performing similar functions;
- experience with audit committee functions and overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements.
3.3 Appointment of Committee Members
Members of the Committee shall be appointed at a meeting of the Board, provided that any member may be removed or replaced at any time by the Board and shall in any event cease to be a member of the Committee upon ceasing to be a member of the Board.
Where a vacancy occurs at any time in the membership of the Committee, it may be filled by the Board.
The Board shall appoint the Chairman of the Committee. If the Chairman of the Committee is not present at any meeting of the Committee, one of the other members of the Committee present at the meeting shall be chosen by the Committee to preside. The Chairman presiding at any meeting shall not have a casting vote.
The Committee shall appoint a Secretary who need not be a member of the Committee or a director of the Corporation. The Secretary shall keep minutes of the meetings of the Committee.
Committee members may not, other than in their respective capacities as members of the Committee, the Board or any other committee of the Board, accept any consulting, advisory or other compensatory fee from the Corporation or its affiliates. For greater certainty, director’s fees are the only compensation an audit committee member may receive from the Corporation or its affiliates.
3.8 Committee Meetings
The Committee shall meet at least quarterly at the call of the Chairman. The Chairman of the Committee may call additional meetings as required. In addition, a meeting may be called by any director or by the external auditors. Committee meetings may be held in person, by video-conference, by means of telephone or by any combination of any of the foregoing.
3.9 Notice of Meeting
Notice of the time and place of every meeting may be given orally, in writing, by facsimile or by electronic communication to each member of the Committee and to external auditors at least 48 hours prior to the time fixed for such meeting.
A member and the external auditors may, in any manner, waive notice of the meeting. Attendance of a member at the meeting shall constitute waiver of notice of the meeting, except where a member attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting was not lawfully called.
A majority of committee members, present in person, by video-conference, by telephone or by a combination thereof, shall constitute a quorum.
3.11 Attendance at Meetings
3.11.1 The President and Chief Executive Officer and the Chief Financial Officer are expected to be available to attend meetings, but a portion of every meeting will be reserved for in-camera discussion without members of management being present.
3.11.2 The Committee should meet periodically, without management present, with the external auditors and management in separate executive sessions to discuss any matters that the Committee or these groups believe should be discussed privately with the Committee.
3.11.3 The Committee may, by specific invitation, have other resource persons in attendance.
3.11.4 The Committee shall have the right to determine who shall and who shall not be present at any time during a meeting of the Committee.
Minutes of Committee meetings shall be sent to all Committee members and to the external auditors.
3.13 Engaging Outside Resources
The Committee is empowered to engage outside resources, as it deems advisable, at the expense of the Corporation.
Millrock Resources Inc.
Millrock Resources Inc. (the “Company”) requires its directors, officers and employees to observe high standards of professionalism and ethical conduct in maintaining the financial records of the Company. Pursuant to its Charter, the Audit Committee of the Board of Directors of the Company is responsible for reviewing (on a confidential basis if necessary) all complaints or submissions received from employees of the Company regarding accounting or auditing matters concerning the Company. In order to carry out its responsibilities under its Charter, the Audit Committee has adopted this Whistleblower Policy (the “Policy”).
For the purposes of this Policy, all accounting or auditing matters which are the subject of a complaint or submission are referred to as an “Accounting Irregularity”.
2. No Retaliation
No officer or employee who in good faith reports an Accounting Irregularity shall suffer harassment, retaliation or adverse employment consequence. An officer or employee who retaliates against someone who has reported an Accounting Irregularity in good faith is subject to discipline up to and including termination of employment. This Whistleblower Policy is intended to encourage and enable employees and others to raise serious concerns within the Company rather than seeking resolution outside the Company.
3. Reporting Violations
It is the responsibility of all directors, officers and employees to report all suspected Accounting Irregularities in accordance with this Whistleblower Policy. The Company maintains an open door policy and suggests that employees share their questions, concerns, suggestions or complaints with someone who can address them properly. In most cases, an employee’s supervisor is in the best position to address an area of concern. An employee’s supervisor may be more knowledgeable about the issue and will appreciate being brought into the process. It is the supervisor’s responsibility to help you to solve the problem.
However, if you are not comfortable speaking with your supervisor or you are not satisfied with your supervisor’s response, you are encouraged to speak with anyone in management whom you are comfortable in approaching. Supervisors and managers are required to report suspected Accounting Irregularities in writing to the Company’s Whistleblower or Chair of the Audit Committee. The Audit Committee has specific and exclusive responsibility to investigate all reported violations. For suspected fraud or securities law violations, or when you are not satisfied or uncomfortable with following the Company’s open door policy, individuals should contact the Chairman of the Company or any member of the Company’s Audit Committee directly. All complaints will be reported to the Audit Committee within five days of receipt.
4. Investigations of Complaints
The Company’s Audit Committee is responsible for investigating and resolving all reported complaints and allegations concerning Accounting Irregularities. The Audit Committee may retain independent legal counsel, accountants or others to assist in its investigations.
5. Accounting and Auditing Matters
Pursuant to its Charter, the Audit Committee is responsible for addressing all reported concerns or complaints regarding corporate accounting practices, internal controls or auditing. The President is required to immediately notify the Audit Committee of any complaint of which he or she is aware and to work with the Committee until the matter is resolved.
6. Acting in Good Faith
Anyone filing a complaint concerning a suspected Accounting Irregularity must be acting in good faith and have reasonable grounds for believing the information disclosed indicates an Accounting Irregularity. Any allegations that prove not to be substantiated and which prove to have been made maliciously or knowingly to be false will be viewed as a serious disciplinary offense.
Complaints or submissions concerning a suspected Accounting Irregularity may be submitted on a confidential basis by the complainant or may be submitted anonymously. All complaints or submissions will be kept confidential to the extent possible, consistent with the need to conduct an adequate investigation.
8. Handling of Reported Violations
The Chair of the Audit Committee will notify the sender and acknowledge receipt of the reported suspected Accounting Irregularity within five business days. All reports will be promptly investigated and appropriate corrective action will be taken if warranted by the investigation. The Company shall retain records of complaints for a period of no less than seven years as a separate part of the records of the Audit Committee.
9. Privacy Violations
In addition to these rules regarding accounting, internal accounting controls and auditing matters, recent privacy legislation, the Personal Information Protection and Electronic Documents Act (Canada) (“PIPEDA”) and the Personal Information Protection Act (British Columbia) (“PIPA”), provide that any person who has reasonable grounds to believe that there has been a contravention of either of PIPEDA or PIPA may notify the relevant Privacy Commissioner.
An organization must not dismiss, suspend, discipline, harass or otherwise disadvantage an employee or deny an employee a benefit because the employee, acting in good faith and on the basis of reasonable belief, has disclosed to the Privacy Commissioner that the organization has contravened or is about to contravene either of PIPEDA or PIPA. Members of the public may lodge anonymous complaints to avoid the possibility of retaliation.
Millrock Resources Inc.
Insider Trading Policy
This insider trading policy (the “Policy”) provides guidelines to directors, officer, employees, consultants and contractors of the Company and its subsidiaries with respect to transactions in shares or other securities of the Company.
The Policy applies to all transactions in the Company's securities, including the acquisition or disposal of, or agreement to acquire or dispose of, any securities of the Company and the grant, acceptance, acquisition, disposal, exercise or discharge of any option (whether for the call, or put, or both) or other right or obligation, present or future, conditional or unconditional, to acquire or dispose of securities, or any interest in securities, of the Company. The Policy applies to all directors, officers, employees, consultants and contractors of the Company who receive or have access to Material Non-Public Information (as defined in section 2 below) regarding the Company. This group of people, members of their immediate families and members of their households are sometimes referred to in the Policy as "inside persons".
1. THE POLICY
1.1 General Policy
It is the policy of the Company to prevent the unauthorized disclosure of any Material Non-Public Information acquired in the workplace and the misuse of Material Non-Public Information in securities trading.
1.2 Trading on Material Non-Public Information
No inside person shall engage in any transaction involving a purchase or sale of the Company's securities, including any offer to purchase or offer to sell, during any period commencing with the date that he or she first possesses Material Non-Public Information concerning the Company, and ending at the close of business on the same trading day on which there is public disclosure of that information, or at such time as such information is no longer Material Non-Public Information. As used herein, the term "trading day" shall mean a day on which the TSX Venture Exchange is open for trading.
No inside person shall disclose ("tip") Material Non-Public Information to any other person where such information may be used by such person to his or her profit by trading in the Company's securities, nor shall an inside person make recommendations or express opinions on the basis of Material Non-Public Information as to trading in the Company's securities.
1.4 Confidentiality of Material Non-Public Information
Material Non-Public Information relating to the Company is the property of the Company and the unauthorized disclosure of such information is forbidden.
2. DEFINITION OF MATERIAL NON-PUBLIC INFORMATION
Information should be regarded as Material Non-Public Information if (a) it relates to the Company or the Company's securities or if it may affect the Company's business prospects; (b) it is specific or precise; (c) it has not been previously disclosed to the public and is not otherwise available to the public; and (d) if it were made public, it would be likely to have a significant effect in the price or value of the Company's securities.
What may be difficult under this standard is to determine whether particular information is material and would therefore be likely to have a significant effect in the price or value of the Company's securities. There are various categories of information that are particularly sensitive and, as a general rule, should always be considered material. Examples of such information include:
(a) financial results;
(b) projections of future earnings or losses;
(c) results of exploration projects or feasibility studies;
(d) news of a pending or proposed merger or joint venture;
(e) news of negotiations affecting major commercial agreements;
(f) news of a disposition of a subsidiary that is not inactive;
(g) impending bankruptcy or financial liquidity problems;
(h) gain or loss of a Business Partner;
(i) changes in dividend or distribution policy;
(j) significant pricing changes;
(k) new equity or debt offerings;
(m) significant litigation exposure due to actual or threatened litigation; and
(n) major changes in senior management.
Either positive or negative information may be material.
3. POTENTIAL CRIMINAL AND CIVIL LIABILITY AND/OR DISCIPLINARY ACTION
3.1 Liability for Insider Trading
Under Canadian law, inside persons may be subject to fines and imprisonment for engaging in transactions in securities at a time when they have knowledge of Material Non-Public Information.
3.2 Liability for Tipping
Inside persons may also be liable for improper transactions by any person (commonly referred to as a "tipee") to whom they have disclosed Material Non-Public Information or to whom they have made recommendations or expressed opinions on the basis of such information as to trading in securities. The various provincial securities commissions have imposed large penalties even when the disclosing person did not profit from the trading. The various provincial securities commissions and the stock exchanges use sophisticated electronic surveillance techniques to uncover insider trading.
3.3 Possible Disciplinary Actions
Inside persons of the Company who violate the Policy shall also be subject to disciplinary action by the Company, which may include ineligibility for future participation in the Company's stock option plan or other equity incentive plans, or termination of the inside person’s relationship with the Company.
4.1 No Trading Periods
From time to time, the Company may also recommend that directors, officers, selected employees and others suspend trading because of developments known to the Company and not yet disclosed to the public. In such event, such persons are prohibited from engaging in any transaction involving the purchase or sale of the Company's securities during such period and should not disclose to others the facts of such “No Trading” period.
4.2 Short Sales
Directors, officers, and employees of, and consultants and contractors to the Company are not permitted to sell "short" or sell a "call option" on any of the Company's securities or purchase a "put option" where they do not own or have the right to acquire the underlying security. For clarity, there should be no options trading except for the equivalent of purchasing a “call option”.
4.3 Dealing in Exceptional Circumstances
In exceptional circumstances where it is the only reasonable course of action available to an inside person, clearance may be given for the individual to sell (but not to purchase) securities when the inside person would otherwise be prohibited from doing so. An example of the type of circumstance which may be considered exceptional for these purposes would be a pressing financial commitment on the part of the individual that cannot otherwise be satisfied. The determination of whether circumstances are exceptional for this purpose must be made by the Company’s board of directors.
4.4 Individual Responsibility
Every inside person has the individual responsibility to comply with the Policy. Appropriate judgment should be exercised in connection with any trade in the Company's securities. An inside person may, from time to time, have to forego a proposed transaction in the Company's securities even if he or she planned to make the transaction before learning of the Material Non-Public Information and even though the person believes he or she may suffer an economic loss or forego anticipated profit by waiting.
5. APPLICABILITY OF POLICY TO INSIDER INFORMATION REGARDING OTHER COMPANIES
This Policy and the guidelines described herein also apply to material non-public information relating to other companies, including the Company's joint-venture partners (the "Business Partners"), when that information is obtained in the course of employment with, or other services performed on behalf of, the Company. Civil and criminal penalties, and termination of employment, may result from trading on inside information regarding the Business Partners. All employees should treat material non-public information about the Business Partners with the same care required with respect to information related directly to the Company.
6. CERTAIN EXEMPTIONS
6.1 Certain Exemptions
For purposes of the Policy, the Company considers that the exercise of stock options for cash under the Company’s stock option plan (but not the sale of any such shares) is exempt from the Policy, since the other party to the transaction is the Company itself and the price does not vary with the market but is fixed by the terms of the stock option.
Approved by the Board of Directors: February 24, 2017